Centuria Capital Group has entered into a bid implementation deed in relation to a merger with Primewest via an off-market takeover offer made by Centuria for Primewest.
In an announcement made today to the Australian Securities Exchange (ASX), Primewest said the rationale behind the decision was both firms offered complementary funds management platforms with similar investment philosophies and strong track records.
Primewest’s board, whose directors represented 53%of Primewest securities, unanimously recommended to its securityholders to accept the merger, in the absence of a superior proposal and subject to an independent expert’s opinion that the deal is “fair and reasonable”.
Under the terms of the deal, Primewest securityholders would receive $1.51 per Primewest security, consisting of:
- $0.20 of cash per Primewest security, and
- 0.473 Centuria securities per Primewest security, equating to $1.31 per Primewest security based on Centuria’s last closeprice of $2.77 per security on 16 April.
The merger would be expected to enhance investment proposition relative to Primewest thanks to:
- Material earnings per security accretion of 19%,which would deliver 6.8 cents on a pro forma FY21 basis;
- Substantial increase in scale and relevance with combined AUM of $15.5 billion;
- Enhanced geographic and sector diversification;
- Access to new distribution channels, and
- Material synergies to support growth of AUM, expansion of property services across both businesses.
Additionally, the merged group would be expected to be well placed for S&P/ASX 200 index inclusion with an estimated pro-forma capitalisation of $2.2 billion.
Centuria chairman, Garry Charny, said: “The proposed Centuria/Primewest Merger is consistent with Centuria’s dual strategy of asset acquisitions and corporate M&A, where this is sympathetic to Centuria’s business model.
“Primewest is a high quality, well-established fund manager and the Centuria board looks forward to the successful completion of the merger and building on Centuria’s position as a leading Australasian property fund manager.”